Treasury

Finance Bill 2020-21 draft legislation and tax documents

lord agnew of oulton: My right honourable friend the Financial Secretary to the Treasury (Jesse Norman) made the following Written Ministerial Statement today.In line with the Tax Policy Making framework, the Government is publishing draft legislation to be included in Finance Bill 20-21, to allow for technical consultation and provide taxpayers with predictability over future tax policy changes.Alongside this, the Government is making announcements on tax administration, business rates, and a number of other areas of tax policy. The Government is also publishing a number of previously announced tax policy documents. Measures that come into effect immediately or retrospectively are previously announced, or are technical amendments to ensure legislation works as intended.As announced on 28th April, the Government has extended the consultation periods for Plastic Packaging Tax, R&D SME Tax Credit PAYE Cap, Construction Industry Scheme abuse, and Notification of uncertain tax treatment by large businesses in response to the COVID-19 outbreak. As a result of this extension, the Government will publish the draft legislation for these measures later in the Autumn. Reform of Tax AdministrationThe Government is announcing a roadmap for Making Tax Digital, alongside its long-term plans for tax administration reform. These reforms are intended to make it easier to pay tax due, enhance resilience, effectiveness, and support for taxpayers.The Government is publishing a document setting out its vision for a trusted, modern tax administration system that is fit for the 21st century and keeps pace with the many countries already operating digital tax regimes. This sets out an ambition for the tax system to work closer to real-time, improving its resilience, effectiveness and support for taxpayers.The Government is committed to delivering a modern tax service for the UK’s increasingly digital businesses and their agents.Digital tools and services can make it easier for businesses to keep on top on their tax affairs, and improve their productivity. Independent research commissioned by HMRC shows that businesses within MTD which fully integrate their accounting and tax software report spend less time on their tax. Micro-businesses who use software to manage their accounts have over 10% higher productivity, according to the Enterprise Research Centre.Digital tools also reduce the scope for avoidable errors which cost the Exchequer £8.5 billion in lost revenue in 2018-19, and make the tax administration system less burdensome for those taxpayers who want to do the right thing.The COVID-19 pandemic has also highlighted the need for a more flexible, resilient and responsive tax system that provides businesses and HMRC with more up-to-date information on businesses and their finances, and enables easier identification and better targeting of taxpayer support.The Government is therefore announcing a roadmap for HMRC’s Making Tax Digital programme. Since April 2019, most VAT-registered taxpayers with a turnover above the VAT threshold have needed to operate Making Tax Digital for their VAT returns, keeping their records digitally and updating HMRC through secure software. Over 1.4 million taxpayers are successfully using this system. This includes over 30% of VAT-registered businesses with turnover below the VAT threshold who have joined voluntarily. The Government will introduce legislation in Finance Bill 2020/21 to extend Making Tax Digital for VAT to all businesses below the VAT threshold from April 2022, to ensure every VAT-registered business takes the step to move to a modern, digital tax service.The Government remains committed to extending Making Tax Digital to other taxes. The Making Tax Digital programme will therefore be extended through new regulations to businesses and landlords within Income Tax Self-Assessment from April 2023. This timetable allows businesses, landlords and agents time to plan, and gives software providers enough notice to bring new Making Tax Digital products to market, including free software for businesses with the simplest tax affairs. HMRC will expand its pilot service from April 2021 to allow businesses and landlords to test the full end-to-end service before the requirement to join.The Government will also consult in the Autumn on the detail of extending Making Tax Digital to incorporated businesses with Corporate Tax obligations.A consultation response will be published setting out how the Government will amend HMRC’s civil information powers, to ensure the UK can continue to comply with international tax transparency standards. Further policy announcements:The Government has made a number of further policy decisions which are being announced today, relating to:Business rates revaluationUnder current legislation, the next revaluation would take effect on 1 April 2022 based on pre-COVID19 property values as of 1 April 2019. In May 2020, the Government announced a postponement to provide greater certainty for firms affected by the impacts of COVID19.The Government is today announcing that the next revaluation of non-domestic property in England will instead take effect on 1 April 2023. So that it better reflects the impact of COVID19, it will be based on property values as of 1 April 2021.Small Brewers ReliefThe Government has concluded its review of this relief. In order to support growth, boost productivity and remove ‘cliff-edges’, the scheme’s taper will be smoothed. It will take effect more gradually over a wider range of production, starting at 2,100 hectolitres per year, and be converted to a cash basis. A technical consultation will be brought forward in the Autumn. The Government will also consult on the potential for a grace period for small breweries that decide to merge.Post-EU exit alcohol reviewThe Government recognises the need to reform the current duty system to support the alcoholic drinks and pubs sector in the longer term, and will publish a call for evidence before end September 2020. Tackling promoters of tax avoidanceTackling promoters of tax avoidance – The Government is publishing a consultation and draft legislation on further, tougher measures to tackle those who promote and market tax avoidance schemes, as announced at Spring Budget. This builds on the anti-avoidance regimes that have already been introduced by the Government, which have helped to reduce the avoidance tax gap from £3.7bn in 2005 to 2006 to £1.7bn in 2018 to 2019. The Government will bring forward further ambitious proposals in the Autumn to strengthen its response to promoters who seek to sidestep the rules.Employee share ownershipEnterprise Management Incentives (EMI) – The Government will legislate in Finance Bill 2020/21 to ensure that employers can issue new EMI share options to individuals who have been furloughed, have taken unpaid leave or have had their working hours reduced below EMI’s current statutory working time requirement as a result of COVID-19. Previously announced publicationsThe Government has published the following tax policy documents, previously announced at the Spring Budget:The business rates review call for evidenceThe call for evidence on pensions tax administrationThe consultation on the design of a carbon emissions taxThe consultation on National Insurance Contributions holiday for employers of veteransThe consultation on whether qualifying R&D tax credit costs should include investments in data and cloud computingThe consultation on the Economic Crime LevyThe summary of responses to the call for evidence on the operation of Insurance Premium TaxThe summary of responses and Government next steps to the Aggregates Levy ReviewThe summary of responses to the non-UK resident SDLT surcharge consultationFor other consultations, the Government is continuing to consider the responses and will respond in due course. Technical tax changes In addition, the Government is publishing a small number of technical tax changes, which are previously announced or provide technical easements for policy. These include measures relating to:Changes to Termination Payments Rules, Post-employment notice pay (PENP) Calculation at s. 402D(1) ITEPA 2003, and Amendment of s.27 ITEPA 2003 – Changes to current PENP calculation to avoid unfair outcomes if an employee’s pay period is defined in months, but the contractual notice period is expressed in weeks, and changes to ensure non-residents who receive PENP are taxed fairly.Legislation with immediate effectThe Government has published legislation for the following measures that will have immediate or retrospective effect:Corporate Interest Restriction amendments – The first amendment clarifies the way special provisions apply for Real Estate Investment Trusts; this comes into force today. The second amendment ensures that no penalties arise for the late filing of an Interest Restriction Return where there is a ‘reasonable excuse’; this applies from 1 April 2017 when the CIR rules commenced.Enterprise Management Incentives (EMI) amendments – This legislation will apply retrospectively from 19 March, and is in addition to protecting existing EMI share options holders from the effects of COVID-19, as legislated for in the [Finance Act 2020 / previous Finance Bill].Annual Tax on Enveloped Dwellings – This measure introduces a new relief from the Annual Tax on Enveloped Dwellings (ATED) for housing co-operatives (those which are not publicly funded providers of social housing), which own UK residential property valued in excess of £500,000. The measure will come into effect retrospectively from 1 April 2020, allowing eligible housing co-operatives to claim a refund for the 2020-21 chargeable period. In addition to these policy announcements, consultations and technical amendments, the Government is publishing draft legislation as announced at the Spring Budget:Van Benefit chargeCollective money purchases pension schemesS4C Section 33 VATAConditionality: hidden economyDraft legislation is accompanied by a Tax Information and Impact Note (TIIN), an Explanatory Note (EN) and, where applicable, a summary of responses to consultation document. All publications can be found on the gov.uk website. The Government’s tax consultation tracker has also been updated.


This statement has also been made in the House of Commons: 
HCWS400

Department of Health and Social Care

Covid-19 Update

lord bethell: On 11 and 13 July 2020, the Health Protection (Coronavirus, Restrictions) (No.2) (England) (Amendment) Regulations 2020 came into force, reopening several businesses and sectors, in order to cautiously return the economy and life to normal in light of the evolving coronavirus pandemic. We have kept the Regulations under continuous review in order to balance these cautious steps to return to normal life with ensuring that the virus remains under control. Reopening of closed premises in EnglandTaking into account scientific advice and the Government’s assessment of the current state of the epidemic, I am making further amendments to the Regulations that ease some of the restrictions still in place. These amendments permit some additional businesses and venues to reopen. The amendments allow indoor; swimming pools and water parks, fitness and dance studies, gyms, sports courts and facilities to reopen from 25 July. Changes to Leicester restrictionsThe reopening of closed premises above will not apply to the City of Leicester and the Borough of Oadby and Wigston at this time. On 16 July, I made a statement in the House, outlining that we are in a position to relax some, though not all the measures in the protected area of Leicester. As of Saturday 18 July, the geographical area to which the restrictions apply was altered in the Health Protection (Coronavirus, Restrictions) (Leicester) Regulations 2020. The local restrictions still apply within the city boundaries, along with Oadby and Wigston. Other parts of the county that were in the protected area are no longer subject to restrictions. They have been brought in line with measures applying to the rest of England.I am also making further changes to the Leicester restrictions. From 24 July non-essential retail, betting shops, retail galleries, drive-in cinemas, and the outdoor areas of zoos and visitor farms will be allowed to reopen in Leicester, and out-of-school childcare and educational establishments will be allowed to reopen. It is as vital as ever that these premises all reopen in accordance with COVID-19 Secure guidelines. The government will continue to review the remaining restrictions in Leicester at least every 14 days with the next review due to take place before 30 July. Further Local RestrictionsBased on our assessment of the levels of incidence and prevalence in some parts of the country, we will also pass a separate set of regulations to exclude Blackburn with Darwen and Luton local authority areas from these changes, similar to our approach to local restrictions in Leicester. This reflects the importance of mitigating transmission in these areas, where the general public must take particular care to ensure local outbreaks do not escalate. These regulations will keep indoor; swimming pools and water parks, fitness and dance studies, gyms, sports courts and facilities closed.Requiring face coverings in shops, supermarkets, shopping centres, banks, post offices and transport hubsAlongside the reopening of these venues – in Leicester and nationally - the Government has also introduced regulations making the wearing of face coverings mandatory in shops, supermarkets, enclosed shopping centres, banks, post offices and transport hubs. This builds on the existing legal requirement to wear them on public transport, which has been in place since 15 June. We have taken this step to give members of the public more confidence to shop safely and enhance protections for those who work in shops. While face coverings are not a substitute for distancing and hand hygiene, there is some evidence to suggest that when used correctly, face coverings may have some benefit in reducing the likelihood of someone with the infection passing it on to others, particularly if they are asymptomatic.Whilst we expect the vast majority of the public to comply with the rules, as they have done so throughout the pandemic, the Regulations also give powers to the police and other enforcement officers to enforce this policy. In the first instance we would expect business and retailers to take steps for compliance where possible (through signs for example). However as is usual practice, if a customer is acting anti-socially or against the rules, staff will be able to call the police for support if needed.We recognise that for some, wearing a face covering is not possible on age, health or other equalities grounds. That is why the regulations include a non-exhaustive list of exemptions from the policy, which mirror those in place for the similar regulations made on public transport. If someone is legally exempt from the Regulations, they should not be questioned or prohibited from entering a setting where these regulations apply.For settings where these regulations do not apply, the advice remains that if you can, you should wear a face covering in other enclosed public spaces where social distancing isn’t possible and where you will come into contact with people you do not normally meet.The Government continues to keep all the regulations under review and will continue assessing if further measures need to be put in place. In the meantime, we have published guidance on these regulations on Gov.uk and will continue to update this to reflect the latest advice. Draft regulations to enable local or regional restrictionsThe Government has also published draft regulations that set out a non-exhaustive set of options, illustrating the ways Government might legislate under the Public Health (Control of Disease) Act 1984 as part of a targeted approach that responds to the particular circumstances of a local outbreak in England.These draft regulations are intended to supplement the CONTAIN framework for controlling future outbreaks of COVID-19, published last week, and are expected to be used by Ministers should actions by local authorities - including use of new powers provided to them by the Health Protection (Coronavirus, Restrictions) (England) (No.3) Regulations 2020, as of 18 July - be insufficient to contain a local outbreak. Any regulations made are expected to be primarily based on one or more of the measures laid out in the draft regulations – though all regulations will be tailored to the circumstances of the specific local outbreak they are intended to address, and alternative measures might be included if those circumstances require it. As ever, as our response to COVID-19 and circumstances in local areas develop over time, we may introduce new categories of intervention and would formulate new draft regulations accordingly.The measures in the draft regulations will allow for effective targeted interventions, while seeking to avoid a return to a national lockdown. In the event that the Government does need to make a significant intervention, it would do so in a way that targets the transmission of the virus while minimising the disruption to the economy and society.The draft regulations and accompanying explanatory note can be found on Gov.uk. I will also deposit a copy in the Libraries of both Houses. By publishing these draft regulations, the Government hopes they may prove helpful to parliamentarians as an illustration of the way we may legislate to address local outbreaks if necessary.